Free-Look Period: Your 10-Day Right to Cancel a New Life Policy
The free-look period (also called the rescission right) gives a new policyowner 10 days after receiving the policy to cancel it and get back every dollar of premium paid — no reason required.
Why it matters on the LLQP exam
Provincial insurance law builds this cooling-off right into every individual life policy. The mechanics are simple but the exam exploits the look-alikes:
- The clock starts when the policy is delivered to the owner, not when the application is signed or the first premium is paid.
- Cancelling within the window means a full refund of premiums. The policy is treated as though it never existed.
- It applies to new policies, including replacements — a replacement is one reason regulators insist on it, since it protects consumers from high-pressure switches.
The number-one trap is confusing the free look with the grace period. The free look is 10 days, applies to a brand-new policy, and ends in a refund after cancellation. The grace period is about 30 days, applies to a missed premium on an in-force policy, and keeps coverage alive. The exam will swap those numbers and watch you flinch.
A secondary trap: students think the free-look period requires the owner to give a reason or pay an administrative fee. Neither is true.
Example question
Nadia receives her new whole life policy on March 3. On March 9 she decides she does not want it and notifies the insurer in writing. What is she entitled to?
- Nothing — the policy was already delivered
- A refund of premiums minus a surrender charge
- A full refund of all premiums paid
- A refund only if the insurer agrees the reason is valid
Answer: C — the 10-day rescission right entitles her to a complete refund, no questions asked.
For the provision it is most often confused with, see the grace period, and for the full contract framework, the life insurance and taxation hub.